What Is Loan Modification?
If you have found yourself with a mortgage that you cannot afford, you are not alone. Due to changes in the economy, changes in your circumstances, non-traditional lending practices, or fluctuations in the market in your area, you may find yourself with mortgage payments that are beyond your means.
This doesn’t necessarily mean that you have to foreclose on your home and absorb the negative credit implications that come from foreclosure, however. The attorneys at Morton McGoldrick can help Tacoma clients modify your loan so that you can stay in your home or surrender your home with as few credit implications as possible.
In the event that a foreclosure is inevitable, we can guide you through the process and help you have all the information so you can make the best choice for your financial future.
Many lenders are willing to work with homeowners on certain aspects of their loan details in order to prevent foreclosure. The attorneys at Morton McGoldrick have successfully modified loans for the benefit of its Tacoma clients and their lenders to avoid the financial loss that is often associated with a foreclosure or short sale process.
If you have a non-traditional mortgage loan, the attorneys at Morton McGoldrick may be able to negotiate with your lender to reduce your interest rate or payments. Such a negotiation, by an experienced Tacoma attorney can allow you to satisfy the financial terms of your loan, keep your home and reduce your monthly or overall payments.
What's a Short Sale?
In some cases, with the approval of your lender, you may be able to sell your home for less than it is worth in order to avoid foreclosure. While short sales still affect your overall credit rating, it may not be as drastic as a foreclosure and you can often recover your credit rating more quickly. Your lender may be willing to take a small loss in order to avoid the costly and lengthy foreclosure process.
What's a Deed in Lieu of Foreclosure?
In some cases, your lender may allow you to completely surrender your home rather than foreclosing. This allows you to protect your credit, although you may experience income tax consequences which will vary depending on your individual case, the value of your home, and the amount owed to your lender or lenders.
What's a Foreclosure Mediation?
In the early 2000s, non-traditional loans and sub-standard loan options made it possible for buyers to purchase homes well beyond their means. With certain loan types, the payments that were once affordable have terms that increase the payments over time, making it impossible for some people to afford their mortgage payments.
Because of this common practice by lenders and banks, in 2011 a law was adopted to allow homeowners to meet with their lender and a neutral third-party mediator to discuss financial obligations, options, and modifications to your existing loan. By making changes to your loan agreement, you may still be able to keep your home under new terms.
Eliminate Personal Liability for Some State Tax Debts
The individual owners of a corporation and members of a limited liability company (LLC) are generally personally liable for all the taxes incurred by the business. However, Washington law provides that the individual owners of a corporation or LLC will not be liable for taxes owed to the Washington State Department of Labor and Industries (L&I) and the Washington State Department of Employment Security (ESD) if the corporation or LLC files a Chapter 7 bankruptcy.
Many corporations and LLCs elect to file a Chapter 7 bankruptcy for their business to prevent these L&I and ESD taxes from following them personally after the business has closed.
It is important that the corporation or LLC files Chapter 7 bankruptcy before L&I or ESD have personally assessed the taxes against the owners of the business.